January 9, 2017

NIAC Concerned That U.S. Banks are Denying Financial Services to Iranians in the U.S.

Contact: Tyler Cullis
Phone: 203-907-7529
Email: tcullis@niacouncil.org

Washington, DC – The National Iranian American Council (NIAC) issued the following statement:

Over the past few years, Iranian visa-holders resident in the United States have seen their bank accounts at U.S. financial institutions shuttered as a result of U.S. sanctions. The most recent case is that of Chase Bank, where NIAC has learned that Chase is closing the bank accounts of Iranian visa-holders. NIAC is deeply concerned that U.S. banks are denying financial services to Iranians in the United States on the basis of their national origin and calls on Chase Bank and other U.S. financial institutions to cease and desist from such discriminatory policies. At the same time, NIAC believes that the repeated nature of these account closures makes it incumbent on the U.S. administration to take immediate steps to provide clarity as to the scope of existing U.S. sanctions laws — none of which bar U.S. banks from opening and maintaining accounts for Iranian visa-holders resident in the United States.

Recently, we have learned that Chase Bank is telling Iranian visa-holders that it is the bank’s policy to refrain from opening or maintaining accounts for Iranian nationals unless such individuals can provide documentation relating to their permanent resident status or their application for refugee or asylum status. Effectively, this policy means that Iranian nationals in the U.S. can only bank with Chase if they have a green card or are in the process of applying for refugee status. While NIAC has attempted to reach out to Chase to understand the scope of its sanctions compliance policies and to provide insight into the application of relevant U.S. laws, Chase Bank has refused to speak to us, citing the “confidentiality” of its U.S. sanctions compliance policies.

Deeply troubling as this is, though, Chase is far from the sole U.S. bank to implement such policies. We have heard from countless Iranian nationals – often, Iranian students studying in the U.S. – that their U.S. bank has closed their account on account of their national origin. It is clear to us that the problem is an endemic one, incapable of resolution absent regulatory change or public guidance from the U.S. administration. For this reason, NIAC is in contact with the U.S. administration about this matter and is pressing for a broader fix so that these incidents are not repeated in the future.

In short, U.S. banks are able to open and maintain accounts for Iranian nationals who are resident in the U.S. on a visa. Under U.S. law, U.S. persons – including U.S. banks – are generally prohibited from exporting goods, services, or technology to Iran. This includes a prohibition on the export of financial services to what are termed “Iranian accounts”. The Iranian Transactions and Sanctions Regulations (ITSR), 31 C.F.R. Part 560, which codifies the U.S. trade embargo with Iran, defines “Iranian accounts” as “accounts of persons who are ordinarily resident in Iran, except when such persons are not located in Iran…” Effectively, this means that U.S. banks are prohibited from providing financial services – including opening and maintaining a bank account – for persons who are ordinarily resident in Iran, except when such persons are located outside of Iran. Bank accounts of Iranian nationals resident in the U.S. are not considered “Iranian accounts” for the reason being that such Iranian nationals are not “ordinarily resident in Iran” and are not located in Iran. Nonetheless, persistent ambiguities as to the application of U.S. law, including this rule, has led to the closure of accounts of Iranian visa-holders resident in the U.S., including Iranian students.

People-to-people exchange between the U.S. and Iran is vital to repairing the historical animosities between our two countries. The Obama administration has made a point of encouraging such person-to-person interactions between the U.S. and Iran, including through licensing a range of person-to-person and humanitarian-related activities. Nonetheless, incidents such as these undermine those efforts to encourage broader ties between the two countries and are thus damaging to U.S. interests. When students from Iran attending U.S. universities are unable to open or maintain a bank account at a U.S. bank – due to the sole fact that they are from Iran – it sends a terrible signal to Iranian students writ large that they are unwelcome in the United States. Even if banks are misinterpreting the relevant sanctions laws, the fact that these issues are being repeated time and again makes it incumbent on the U.S. administration to immediately remedy the situation, including through regulatory revision or public guidance as to the scope of current U.S. law.


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